The FCC Imposes Netflix’s Broadband Policy

[Commentary] More than one-third of today’s expensively rolled-out bandwidth already is consumed in peak hours by a single company, whose customers represent a tiny minority—about 1.2%—of Internet users. Make no mistake: The bandwidth used by Netflix is paid for. But it’s paid for inefficiently, by spreading the cost over all broadband subscribers.

In the airline industry, if backpackers and grannies had to pay for the frequent connections, last-minute seat availability and other features demanded by business travelers, there would be fewer planes, fewer flights, less connectivity, less travel for everyone—which is a fair model of the future that utility regulation will now create for broadband users. Unfortunately the entire confused and inane thrust of federal Internet policy lately has been to sustain the Netflix distortion. The cable guys resisted Obama regulation because that’s what cable guys do, but they can be expected to make their peace with a Netflix-Federal Communications Commission agenda that reinforces their incumbency. Meanwhile, in a year or two, expect to notice that the broadband speed increases aren’t coming quite as reliably as they once did.